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Stocks V / Viacom, Inc.

URL:  https://boards.fool.com/it-is-a-very-interesting-situation-dish-is-the-20466744.aspx

Subject:  Re: EchoStar, Viacom Go for the Jugular Date:  3/10/2004  4:32 PM
Author:  Goofyhoofy Number:  195 of 312

It is a very interesting situation. Dish is the weakest media company.

Actually it's one of the strongest distribution companies. First is Comcast, with 20+ million subscribers. Then comes Time Warner with 12 million. Then comes DirecTV with 12 million, then Dish with 9 million.

Down below Dish are Charter, Cox, Adelphia, Cablevision, RCN, Susquehanna and a bunch of other fairly familiar names...
http://www.ncta.com/industry_overview/top50mso.cfm

The only ones on the list with significant content are Time Warner and Fox. Comcast has a teensy bit, although they're trying to get a bigger bite with Disney.

For instance when News corp's Direct TV goes to bid on content they can use Fox as leaverage against other players wishes for a price hike.

Maybe, I suppose. Are you saying that when Time Warner wants a hike for HBO, Fox will be able to say "Well, we won't carry HBO, we'll just offer the Fox Movie Channel instead."

I don't understand how this is different from what Dish is doing with CBS right now. And when it comes to Fox, Dish can simply say "OK, we won't carry FMC or FX or Fox Sports South or any of the other weaker Fox properties." Both guys - both distribution and content have a club. I hope they both start using them on each other to stop the incessant rate hikes from content providers, particularly ESPN (as tiny little Cox has threatened to do, and as happened with the Yankees and Cablevision in NYC last year.)

Via wins this battle either way. Sooner or later Dish has to give in or fade away out of business.

I don't see why. You think CBS can afford to give up 10% of the country for their distribution? I am pretty sure that the ad agencies which have agreed to ratings guarantees will be knocking on the door looking for make-goods from CBS and the Viacom properties soon. Dish's only exposure is the cancellation of subscribers, which may or may not happen over the short term. If the struggle goes on for a long time, then I agree they have some risk.

Charlie has stated that Via and Dish are on the verge of an agreement. I think this is not quite honest...but dont want to get in trouble on a message board for framing that in other terms.

Maybe. We will know when the fight is over and Dish either does or does not add Nickelodeon GAS (kids games and sports channel), which is what Viacom is trying to force onto the system. I haven't seen it, but it sounds like a pretty weak concept.

Via is holding all the cards.

On this one you're wrong. They have a good hand, but so does the distributor.

Dish has to be revalued by this fiasco in the very short term

As I have noted, I think Viacom has more short term risk, and Dish has more long term risk if the fight is protracted.

So sometime soon the institutional guys are going to figure this all out and dump the stock.

And that's what they say about every company that shuts down because of a strike or has a distribution channel pinched. Doesn't usually happen, because these things have a way of getting settled.
 


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